7:25 PM
Waa Haa Haa
by Simon Montlake, Forbes Staff
28 May 2013
Not a fan of China's dam (Image credit: AFP/Getty Images via @daylife)
While Western powers shunned the regime for its right abuses and imposed economic sanctions, Chinese envoys enjoyed unparalleled access to the top brass. Now that the winds of change have blown and the junta is no more, replaced by a civilian administration eager to court the West, China faces a far trickier task in managing relations with Myanmar. Its valuable investments in gas pipelines and hydropower dams have become a lightning rod for critics emboldened by parliamentary democracy and an end to press censorship.
Beijing’s new man in Myanmar is Yang Houlan, whose previous postings include ambassadorships in Kabul and Kathmandu. Yang arrived in March and has met with Aung San Suu Kyi, the opposition leader, and civil society activists as well as government officials. He says that his job is to improve relations with all sides in Myanmar and correct “misunderstandings” about China’s economic interests. “Myanmar is into a transitional period. There’s a new situation we have to face,” he says. Speaking in English during an hour-long interview on May 23, he conceded that Chinese state-owned enterprises shared some blame for the negative views of China held in Myanmar. One reason, he says, is that Chinese SOEs have failed to promote their social outreach activities. ”In the past, China has the practice of doing, not speaking. People don’t know how these projects will (help) national development and people’s interests. That’s the problem,” Yang told FORBES.
Earlier this month, Yang visited the starting point in western Myanmar for cross-country oil and gas pipelines built by China National Petroleum Corp (CNPC). An oil depot will transfer crude destined for southwest China’s energy-hungry cities. Offshore gas tapped by Daewoo International will follow the same route. The gas pipeline is due for completion by Jun 1, though it’s unclear when supplies would start flowing. CNPC has said that it’s spending over $20 million on communities living in the project area and along the pipeline’s route, which passes through ethnic minority areas. As The New York Times noted, this brings CNPC in line with Western multinationals that typically carry out, and publicize, social responsibility projects in developing markets. Yang says the embassy has encouraged firms to go public. “We have asked Chinese companies to change their practice and have more communication with locals,” he says.
However, such advice comes too late for China Power Investment, the Chinese firm building a giant hydropower dam along the Irrawaddy River in northern Kachin state. In 2011, President Thein Sein announced the suspension of Myitsone dam, citing “the people’s will”. Chinese officials were caught off guard by the decision, which was widely seen as a pushback by the new administration against a Chinese resource grab. Yang claims that there are “misunderstandings” over the project, but seems resigned to a long wait for resolution. “It was a decision by the president. This government will not restart the project,” he says. Other smaller dams along the same river network are still underway, despite intermittent fighting between government troops and Kachin rebels.
To China’s discomfort, Myitsone became a national symbol in 2011 of unbridled foreign extraction of resources. Compounding the anger over its environmental impact and the displacement of thousands of villagers is the fact that most of the electricity generated was to be exported via transmission lines to southwest China. Given the remote location of the dam, and the underwhelming state of the local economy, such a deal makes some sense, provided the proceeds are reinvested wisely. However, the revival of Myanmar’s economy under new management changes this equation as domestic energy shortages are acute. It might prove palatable to rethink the project along these lines. But the damage to China’s image is already done. Meanwhile, Thailand is currently the biggest beneficiary of Myanmar’s energy resources: over 25% of its electricity is generated from gas piped over the border.
Yang says China views Myanmar’s social and economic development as a “win-win” for both countries. But as ambassador he recognizes that this message doesn’t always come across in Myanmar. So the Chinese embassy is using Facebook FB -2.94% (banned in China) and public forums to get its message out and counter negative opinions in Myanmar’s punchy press, which is making up for years of suppression at the hands of the military. Yang says that the media often relies on rumours, not facts to make judgements on China’s investments in resource industries. “Some media look through colored glasses at Chinese projects,” he says.
Take CNPC’s school building program. The company says it has built several schools, as well as clinics and other facilities, along the pipeline’s route, part of its $20 million largesse (the biggest chunk is set aside for power generation). But protesters have taken issue with the program, saying that the new schools lack teachers. Yang is frustrated by such criticism. ”This isn’t the Chinese company’s responsibility. We can’t provide teachers. This is the government’s responsibility,” he says. Welcome to the pitfalls of corporate social responsibility in developing countries with rich resources and feeble government.
http://www.forbes.com/sites/simonmontlake/2013/05/28/chinas-envoy-tacks-with-winds-of-change-in-myanmar-burma/
